I spoke at Marketing Week Live last week on the "Future of Relationship Marketing". It's always great speaking about the future of something as in theory nobody can question you; by definition the future is yet to happen - so I could be right...
However, whilst the topic was on the future, in reality the future is already happening, we just aren't seeing much of it within mainstream loyalty programmes (yet).
As I've written about previously, the presentation was all about Interaction Loyalty and the impact that recognising every interaction - every check-in, status update or product review - has on loyalty programme design and specifically reward and recognition.
Given the requirement to recognise activities which don't always have a nice neat margin attached to them, we also now need some different tools in the box to support this - and this is where gamification thinking comes in. Through gamification we can exchange rewards with actual value for rewards with social value and link recognition not just with rewards but also with core motivation. However, what's interesting to note is that gamification is simply a set of tools within Interaction Loyalty - not a new definition of loyalty itself.
Embedded below are the slides I used, feel free to review and comment.
Pizza Express have launched a new iPhone app which redefines the space for retailers and at the same time provides a possible glimpse into both the future of payments and CRM (but more on that later).
The application includes a number of clever features such as allowing customers to view their past receipts (great if you need to expense something), create "favourite" restaurant locations and pre-book a table. The really interesting part however is a deal with PayPal that also allows a customer to pay their bill directly via their mobile by entering a unique 12 digit code printed on their receipt - letting the customer then simply get up and walk out as it's seamlessly integrated into the restaurants POS.
This in itself is an interesting loyalty play as Pizza Express get to know who the customer is, what they purchased and how often they come and there is not a loyalty point in sight. It's a compelling application that smooths the purchase process, making the next purchase more likely.
Whilst this is a really innovative app for Pizza Express it's actually part of a wider trend to disintermediate the payment eco-system and the functionality is quite similar to that offered by payment start-up Square.
Jack Dorsey, Square's founder is quoted as saying that they want to replace cash registers, wallets and loyalty cards. Rather than simply trying to replace a specific part of the existing process - exchanging the plastic card for the mobile phone - Square are actively trying to join the whole process up with Mr Dorsey saying:-
"We think it should be one system"
One really interesting innovation within Square is their application Card Case. This allows a customer to create a list of their favourite places and to setup a tab with them, simply paying by giving their name - no swipe of the card necessary. Like the Pizza Express app it also provides access to your receipts; in essence centralising your payment and purchase history and making it accessible.
This is a really interesting feature that both Pizza Express and Square have in common - the provision of customer data back to the customer - and it is becoming increasingly common as customers begin to expect their data to be collected, but increasingly consider it "their" data. When I shop at Tesco I know they are tracking my purchases, however when I go online and see new products added to my favourites list it begins to actually feel like my data.
This trend of providing information back to customers and giving them access to and ownership of it is also gathering pace.
Within websites and applications for example you are increasingly given the option to login via social networks such as Facebook or Twitter. While you still login, connecting via a social network provides a subtle change. You are actually granting permission to that application to connect to you rather than the other way round. At any time, I can review my relationships with different applications and simply close them down by removing the authorisation. I can also look at the permissions I've granted to those applications and change what information they can see.
There has been a transfer of power within identity management. It's now my identity and I can choose who has access to it, how much access they have and when I want to end it.
Imagine this trend being extended to all your interactions.
Within a supermarket loyalty programme for example you could link your purchase history to an app from a CPG manufacture like Unilever. You'd be doing this in the full knowledge that Unilever could then access your purchases and provide you with relevant offers (or reward points). You'd be choosing how to use your information for your benefit.
This is a really amazing thought and something that has been termed VRM or Vendor Relationship Management by Doc Searls, a veteran technology journalist and key founder of ProjectVRM which he describes, saying:-
Since the dawn of the Industrial Age, large companies have been working to "capture" and "lock" customers inside what we today call "silos" and "walled gardens."... ProjectVRM is a new Berkman Center research and development effort that is working to provide customers with tools that provide both independence from vendor lock-in and better ways of engaging with vendors -- on terms and by means that work better for both sides.
I love the idea of this - letting customers engage with brands on their terms with their data - and can see many applications across different industries.
How far this can go will be interesting to see (and to define), but the principle of making customer's data accessible to customers is a key trend. Facebook, Twitter et al. have already proved that making their systems open and giving customers control has only made their service more compelling.
Brands and loyalty programmes collecting customer data and interactions may have to take a leap of faith and empower the customer for the greater benefit of both the customer and the brand.
Geo-location is a hot topic..and it's getting hotter.
Foursquare, one of the biggest location based social networks took 12 months to get it's first million users, just 3 months to get it's second and is reported to have recently secured an additional $20m in funding. Brands everywhere are experimenting with it to see what it might offer from Barbie to Jimmy Choo, Starbucks to Dominos.
In theory location is the ultimate marketing mechanism - being able to target consumers when they are actually out and about, wanting to buy, and right by your store. The idea is nothing new though. Ever since the mobile became ubiquitous, agencies and brands have been talking about how they could connect a consumer to a brands physical location.
The (somewhat unimaginative) idea was that as I walked past a store I'd suddenly get relevant, targeted offers sent to my mobile - beckoning me in with their irresistible offer. The reality would be quite different though and would consist of being spammed with irrelevant offers from stores I have no intention of frequenting and a mobile that is buzzing every few seconds.
In one recent article, this idea was still being promoted, saying:-
Cell broadcast works by blanket-sending a message to a mobile phone cell or series of cells within a specified location. The applications for this are endless. Food chains could text everyone in a shopping centre with their latest offers and details on how to get to their concession stands.
The problem with this original premise is that geo-location is being treated like traditional push based mass media. A marketing message needs to be delivered and it gets delivered where the potential audience is greatest - or is pretty close by.
The difference with tools like Foursquare is that they are much more collaborative. More pull than push, consumers choose who to interact with and when. Brands providing something relevant are rewarded with interactions or check-ins. Consumers choosing to interact are rewarded with offers, tips and occasionally meeting old friends or making new ones.
However I know from the flack I get from others for checking-in all the time that Foursquare in it's standard form will probably not appeal to the masses. Chasing badges just isn't going to cut it for many people. Foursquare are not resting on their laurels though - following the tradition of Facebook and Twitter, they have opened up their platform to developers to allow applications to be built on top and it is probably this more than anything which will really open it up to the masses.
In an interesting blog by Chris Dixon, he describes how this progression works with technological advances building on each other - forming a stack - so Intel chips -> PCs - > Windows. With regard to location marketing, GPS enabled devices have allowed for services like Google Maps, leading to utilities like Foursquare which connect people to places. The use of applications on top of Foursquare is just the next natural step.
So whats in it for brands?
Well for the moment, it's more of a one to one conversation between the consumer and the brand with many brands not even listening yet. Those that are listening are ahead of the curve and are starting to build a dialog with customers - rewarding them with offers, discounts or simply the knowledge that they are listening.
However, as the networks grow and the tools which sit over these become more useful, brands will benefit from implicit advocacy as consumers see their friends frequenting different places and choose to follow - turning advocacy into footfall or check-ins. In fact, Foursquare see this ability to allow peoples check-in's to drive footfall as a key area of growth with co-founder Dennis Crowley saying:-
We can anonymise data and use it to show venues trending at that moment. Twitter helped the world and the search engines know what people are talking about. Foursquare would allow people to search for the types of place people are going to – and where is trending – not what.
If results from early adopters like Dominos or Jimmy Choo are anything to go by, brands are then free to start a dialog to turn a check-in to a check-out.
Ever since the first e-commerce site was launched there has been a perceived battle of online and offline retail.
Online retail with it's apparent advantages of economies of scale, the ability to focus on the niche and the low start-up costs. Offline retail with it's higher costs to serve, reduced range (compare a high street book store with Amazon) and limited catchment areas.
But offline retail has one real advantage - it's physical.
I can see, and touch what i'd like to buy. I can compare products next to each other. I can assess size and appearance. This physical connection is not required across all product categories - which is why traditional music shops have struggled - but for many types of product, seeing it in person can be a necessity.
However, the lines are blurring and its less about offline or online shopping and more about convergence (or multi-channel retailing in retail lingo) - and the mobile device in your pocket is enabling this.
In a recent article in the Wall Street Journal, Forrester's e-commerce analyst Sucharita Mulpuru asked the question
"If somebody buys from a mobile device in your store, is that a Web sale or a store sale?"
This is interesting as for many people, one of the issues of buying in a store is actually the costly sales assistant. Yes I need someone to help sort out the actual purchasing of an item, but I'm less inclined to believe they can help me to select the right product - do they have the knowledge - and that they have my best interests at heart - how are they compensated.
The great thing about the integration of online and offline through the mobile device is that I can stand in front of a product in store and access reviews and pricing information instantly. I don't need a sales assistant to tell me why it's a great product, I have access to hundreds of reviews from real people to tell me if its a great product.
In a recent video they did for the National Retail Federation's 2010 Retail Innovation & Marketing Conference, they demonstrated their view of mobile integration within offline retail.
One thing I particularly liked in this thought piece from Best Buy is the linking of the physical product to online information. This was something I discussed on this blog back in 2008 and it's great to see a retailer with this on their radar.
Another interesting retailer is Starbucks. They have recently partnered with "new kid on the block", social network FourSquare, which they describe as:-
People use foursquare to "check-in", which is a way of telling us your whereabouts. When you check-in someplace, we'll tell your friends where they can find you and recommend places to go & things to do nearby. People check-in at all kind of places - cafes, bars, restaurants, parks, homes, offices.
So basically I can let FourSquare know where I am at any time, and they will let me know if my friends are there as well, plus it will automatically update my other social networks like Twitter and Facebook with my location. However, FourSquare aren't doing this just for fun as their website goes on to say:-
We all have our local hangouts and foursquare keeps tabs on who's the most loyal of all the regulars. If you've been to a place more than anyone else, you'll become "the mayor"... until someone else comes along and steals your title. It may sound a little silly until you see the list of places that are offering freebies to our mayors - free coffees, free ice-cream, free hotel stays - it pays to be a foursquare loyalist and check-in whenever you go!
And there's the magic.
FourSquare get to know where you go and how often - and this is what Starbucks is buying into.
They have partnered with FourSquare to develop a reward programme which recognises people for frequent visits. The rewards at this time are simply a "Barista Badge" (badges are a big thing on FourSquare), but this is just the beginning. Speaking in the New York times Bits blog, Chris Bruzzo, Vice President for Brand, Content and Online at Starbucks says:-
“It’s where the intersection between digital and physical starts to get interesting. Starbucks loves that, because we’re always looking for that intersection, which we think is the evolution of social networks.”
I think this is a very interesting development - whilst it may be the evolution of social networks I think it's actually the evolution of retail.
This "intersection between digital and physical" is all about enabling and tracking customer interactions. Regular readers of this blog will know I've spoken about recognising and rewarding this interaction before - and this is what Starbucks are doing.
In some senses the interaction is more important than the transaction as the interaction is further back in the buying process - if you can get someone to interact with you more often you have a better chance of converting this into a transaction - a sale.
The forward thinking retailers are recognising this and also recognising that traditional retail loyalty solutions are in the most part reactive - rewarding a decision that has already been made.
Of course there is a hope that the loyalty programme influenced this decision, but retailers like Starbucks and Best Buy are also ensuring that their loyalty initiatives are working harder and smarter - engaging customers before the purchase - and this is the traditional space for more mass above the line marketing; another area which is seeing a convergence - this time between above the line and below the line.
To me this is the real future of retail and retail loyalty.
Not only the convergence of channels but also the convergence of marketing. Engaging, recognising and rewarding customers across channels - before they purchase - before they are even a customer.
This isn't the end of traditional retail - it looks to me like it's just moved up a gear.
Social networks may have made the online world a much more connected experience – allowing us to connect with someone we know (or would like to know) or become a fan of a brand that we want to hear more from - but what about the real world.
How does someone connect with a brand in store, or connect with each other.
Okay, I know it’s a stupid question - we’ve been doing this “offline” for millennia – we talk, we exchange details. However this typically involves a pen and something the Chinese invented over 2000 years ago – some paper. If we do this a lot then the paper may be pre-printed in the form of a business card.
Meet someone you like and want to chat again, you’ll need to note down their contact details (or swap business cards). Like the retailer and want to hear more from them, you’ll need to fill in an application form.
But that could be all changing.
New technologies are allowing people to exchange details when they meet, seamlessly between devices such as a mobile phone. There is still a requirement to make that first move and start the conversation, technology hasn’t managed to help with that yet unless of course you count the opening line “Do you Poken?" as both an ice breaker and a request to connect.
You google, you text, you chat, do you poken?
The Poken is a cute little device that comes in various form factors such as a key ring and which allows you to connect with another person simply by tapping your Pokens together.
When you then plug the Poken into your PC and go online you’re able to see all the people you connected with in a timeline and crucially with all their contact details, social networks etc. that they have chosen to share.
A different route is via the mobile with one of the most popular applications being, as you would expect, on the iPhone.
Called BUMP from Bump Technologies this application allows you to exchange details by simply bumping two iPhones together.
Using some clever latitudinal thinking, the phones themselves don’t actually exchange anything and instead the solution recognises the unique properties of the bump itself from each phone, matching these up centrally on their servers and then sharing details where a match is found.
It’s not just contact details which can be exchanged but also content like photos - “bumping” them from phone to phone.
Whilst these technologies have been around for a little while and the Poken made a few headlines and blogs at the SXSW about a year ago, they’ve yet to really mature and gain mass penetration and usage.
However I think they have so much more to give.
As facebook matured from being solely about connecting people to also connecting with brands, groups and causes, these technologies could enable the same thing in the physical world.
Walk into a store and tap/bump to get immediate offers to your mobile
See an item you like… tap to get it added to your wish list
Want to join the loyalty programme, tap at POS
These solutions essentially allow you to be be you – not having to carry multiple cards or fill in multiple forms but instead, simply to tap a device to indicate your identity.
There are many arguments that these solution do nothing more than what could be achieved with Bluetooth today or NFC as it begins to roll out across mobiles.
However that’s not the point – Poken for example is essentially nothing more than a proprietary RFID solution - it’s not about the technology, it’s about a simple, branded solution which people understand and feel in control of.
I think these types of solutions which allow identity to be easily captured in the physical world, whether it’s between people, brands or products will bring the same kind of advantages that we get in the online world – allowing interactions and relationships to be tracked and measured.
For marketers the online interaction has become an important measure – in some ways more important than the transaction - with the interaction being almost a “precognition” of the transaction itself.
Can technology like BUMP or Poken enable the same thing in the physical world? It’s going to be fun finding out.
Technology moves ever quicker with a new set of doors opening at an increasing pace.
It would make sense then as we enter January - named after Janus, the Roman god of gates and doors - to look forward to the new year and consider the possible trends which might make it into our marketing programmes.
There is a theme in these predictions (which wasn’t intentional) and it all ties to this first one…
#1 - A stitch in time…
The web is moving real-time. As more and more people get immersed in social networks like Twitter and Facebook they are getting used to information having a best before date. Witness the latest deals that both Google and Bing have done to bring real time search to the masses. Now typing in “snow UK” in Google brings up results which are actually useful – a weather report (and twitter reports from seconds ago) of the current snow conditions.
What does this mean for marketing programmes? Well it means that monthly emails or quarterly newsletters are going to be perceived as quaint at best. In 2010 you’ll need to make sure you have something to say and say it fast. Better still get someone else to say it for you…
#2 – Many hands make [profitable] work
Loyalty programmes still see individuals when in fact individuals actually see groups. Whether that group is you and your partner or your family, your friends or co-workers, we are all part of many different groups which we interact with in different ways.
Opening up the programmes to allow interaction within these groups will provide additional word of mouth opportunities as well as increased loyalty. Indeed, a recent white paper by Colloquy entitled The New Champion Customers found that heavy users of loyalty programmes are over 50% more likely to be word of mouth champions (meaning they are both willing and able to recommend).
What was also interesting from the research was that 2 of the top 5 reasons for WOM participation were “to be first” and “to share my opinion” – both of which become more empowered by real-time communications – whether this is the brand sharing the latest information with the member or the member sharing it with friends.
Expect to see this utilised more in programmes in 2010 as brands truly look to unlock the social value within their loyalty membership.
#3 – What goes around, comes around
I find it interesting that everyone is now talking about real-time information and the “push” based services to deliver them. I’ve been around a while so I remember back in the heady days of the “information super high-way” companies like PointCast were going to deliver this dream – but then ultimately failed due to the technology of the time not being quite as good as the idea.
The same was true of net computers (NCs). Essentially a device for doing not much more than browsing – they were much feted when the idea was first announced by Oracle CEO Larry Ellison back in 1995 – only to disappear in 2000 and then reappear as the popular gadget of 2009 in the form of the Net Book. We’re likely to see further interest in these in 2010 with the (possible) launch of the much hyped Apple Tablet.
From a marketers perspective you could say the same thing about 1 to 1 marketing. Much hyped when it was first published back in 1993, both technology and available data didn’t really allow it to be fully supported. This has changed though and personalised one to one communications are possible – not just in terms of content but also delivery channel and frequency with providers like Silverpop gaining increasing accolades.
Might be time to take the book back off the shelf - expect to see more programmes bringing this onboard in 2010.
#4 – It’s the taking part that counts
I’ve blogged about it for most of this year and was writing about it back in 2006 - but interaction is the new transaction in loyalty. Wrapping it up under “Engagement” with the 4i’s of involvement, interaction, intimacy and influence – Forrester consider this the new Marketing Metric. As they say in their white paper:-
“Companies also need to track individuals who influence others to buy. For example, a customer who buys very little from you but always rates and reviews what she buys can be just as valuable as someone who buys a lot — her reviews might influence 100 other people to buy your product. Tracking only transactions and loyalty at the end of the funnel misses this significant element of influence”.
I know this is only going to get bigger in 2010 and don’t be surprised to see reward programmes giving out points and miles just for the taking part.
#5 – Bird in the hand is worth two in the bush
In loyalty marketing it is well known that redeemers are the most active, loyal and generally profitable customers – so getting people to redeem is always key.
Digital redemptions can really help in this respect as an e-voucher for example can be despatched immediately, letting points in an account be translated into a reward in their hand within seconds. More and more merchants are beginning to see the value of these with many allowing e-voucher codes to be used both on and offline.
These are popular reward items not only because of the immediacy of them but also because of the cost effective fulfilment – no postage, no handling, no security storage. Loyalty programmes are clamouring for these and in 2010 I bet more merchants will be clamouring to provide them.
Agree, disagree – if you want to add more feel free to comment.
Ghost of Christmas Past… To see what I thought would be happening in 2009 – and whether I got any of them right, check out last years post.
ASDA CEO Andy Bond reportedly said just a few weeks ago
"You can't buy loyalty with plastic points"
Going on to say about Tesco Clubcard “They're based on conditional selling and only reward people that spend the most. At ASDA we reward customers with the lowest-possible prices everyday. That's why more people than ever are choosing to shop at ASDA.”
On the first point he’s dead right, you can’t buy loyalty – plastic points or otherwise – you have to earn it.
On the second point I think he’s dead wrong and here’s why.
“Conditional Selling” – Unlike many US style grocery programmes which do actually have conditional selling - giving one price for card holders and one for none card holders - there is no tiering in the Clubcard model. Everyone is equally rewarded and your reward is simply based on overall spend; assuming of course you join the programme
Obviously you have to spend enough to reach a minimum threshold for reward, but for a normal loyal customer this is not difficult. In fact it is less about rewarding high spending customers and more about rewarding loyal customers – those who shop with you regularly.
“Lowest Possible Prices” – To fight on price you really have to be the cheapest. I decided to try out ASDA by doing a monthly shop on ASDA online for exactly the same products (substituting where required) as my normal shop at Tesco. At the end of it there was a few pence in it so hardly worth jumping up and down about – and I get Clubcard points at Tesco.
Maybe I’m not a typical ASDA customers and I’m also not a Tesco sycophant. However I do believe that for a retailer like ASDA, understanding your customers is key – and interestingly so do ASDA to a point.
Reportedly gathering information from a pool of 18,000 shoppers that will be used to influence which products it sells and to drive the business around common themes that emerge – they are doing their level best to gain an understanding of their customers.
Whilst this may provide insight akin to what Tesco gets from Clubcard data, it will not allow for a feedback loop which would enable them to go back to individual customers to recognise, reward and influence.
So are ASDA loyalty rejecters?
Well lowest prices do not reward or recognise customer loyalty – I get that price if it’s the first time I’ve shopped there or the 51st time. What they will do however is maintain customer loyalty for that segment of customers who are price/promotionally sensitive – but only for as long as you have the best price.
However ASDA do have another trick up their sleeve and that’s transparency. Andy states “My ambition for Asda is to actively involve customers in every aspect of the business, to lift the lid on how we do things, and enable our customers to help make decisions that have an impact on what we sell and how we sell it.”
It’s obviously early days for this initiative and whilst I’ve banged the drum for a while about it being less about the transaction and more about the interaction it remains to be seen how many customers will actually want to “lift the lid”.
Ultimately a good loyalty programme will allow you to have a two way dialogue with a customer about topics which are relevant and create a win-win for the customer and the retailer – in this respect ASDA are making positive moves with a non-points based mechanic.
Far from being loyalty rejecters I think ASDA are doing their best to embrace loyalty and to generate genuine customer engagement – the jury however is still out on how and whether this will actually work.
Building customer loyalty and engagement - essentially creating a relationship - is much like having a conversation, just over an extended period of time.
Whoever initiates it, whether it is the brand through communications or the customer through a first interaction, the aim is to continue the conversation.
The last thing you want as a brand is to be viewed as socially inept – a social bore - with customers looking to get away at the first instance.
American novelist Edgar Watson Howe famously said of having a conversation:-
No man would listen to you talk if he didn’t know it would be his turn next
The trick with loyalty communications is to get the customer to know it’s their turn to respond and this means creating relevant, engaging communications which demand a response – an interaction.
In order to get a response you first need to listen - no one likes to be talked at or talked over.
In a marketing sense customers are talking to you all the time – feedback in what they buy and what they don’t; when they complain, when they ask questions – in every interaction. If you’re not listening to this and simply send them the next “mass message” (or no message at all) why be surprised when 95% simply give up the conversation.
Even when you listen and respond back with something relevant, you need to consider how to keep the conversation going.
Within a normal conversation, if you answer the question “Where are you from?” with a one word answer such as “Northampton”, don’t expect much more from the conversation. People need something to build upon to keep a conversation going – giving them a reason to respond and letting them know it is their turn next.
If they’ve never heard of Northampton they will struggle to move the conversation forward and likewise for a brand if you, for example, simply say “Thank You” after a purchase, the customer will have no reason to continue the conversation.
Look at conversation experts Amazon – they lead you up to the purchase with wish lists and recommendations and after purchase make further suggestions that fit with your purchase and then ask you to review the purchase. Always looking to extend the conversation – letting you know it’s your turn.
In a white paper by Bazaar Voice they call the development of this conversation the Participation Chain, going on to say:-
[the] “participation chain” – [is] a way of cultivating user involvement so that each action builds upon the one before, building value along the way.
Going on to recommend that you “look for participation dead ends, such as thank you pages that lead nowhere [and] consider possible ways to follow up.”
This doesn’t just apply to e-commerce sites. Think about an individual you’ve spoken to who always relates the same story when you meet – would you be keen to seek out this person at a social function… probably not.
From a brand perspective, if every time someone comes to your site they see the same content do you really think they’ll want to continue the conversation? Are you actually enabling them to have a conversation or simply talking over them every time they come with the same old message (or a message you want to talk about regardless)
Building a conversation with customers is critical to building engagement; and increased engagement leads to increased customer value. As Bazaar Voice points out:-
Time and money are two sides of the same coin. In general, the more time a customer spends with you – assuming a positive experience – the more likely they are to spend money with you.
As a brand it might be worth brushing up on those social skills to develop a customer conversation – learning how to be a social more, not a social bore.
Seth Godin made an interesting point in one of his latest blogs when he said:-
Your industry has been completely and permanently altered by the connections offered by the internet. [..] Not a little different, not just email enabled or website marketed, but overhauled.
Whilst additional channels to consumers such as email, IM and social networks can be utilised in traditional ways - essentially lowering the cost per contact - it’s how these can be really leveraged to completely overhaul the process – to break the mold - which is most interesting and retention marketing is not immune from this.
Within loyalty we talk less and less about the actual transaction and more and more about the interaction.
Loyalty programmes are beginning to focus on recognising and rewarding this interaction – in all its forms – because we know that interaction with the brand leads to positive customer sentiment – and this in turn leads to increased consideration and transactional behaviour.
I’ve spoken previously about Dell and how they interact with their customers through IdeaStorm. Well it looks like brands are increasingly seeing the benefits of involving consumers in decision making. MyStarBucksIdea for example allows customers to share, discuss and vote on ideas, but also crucially to be able to see how the ideas have been actioned – this isn’t an empty suggestion scheme, it’s a true interaction.
UK clothing retailer New Look is embracing interaction across many channels. It’s New Look TV through YouTube allows consumers to interact by uploading videos of themselves and their friends, interacting via Facebook with all of it linking back into the main New Look website. For those really keen on getting close to the brand, the MyLook website allows consumers to share their views, make suggestions and connect directly with New Look.
One brand that really excites me is GiffGaff, a new UK mobile brand. They are taking this interaction one step further with the launch of what they describe as the people-powered mobile network. Their model is very interesting because while they have elements of the “ideas” model - allowing members to nominate and feedback on suggestions - they have linked this back into a currency in the form of rebates off your mobile bill.
So in theory, the most active brand advocates – those who provide suggestions, take part and recommend friends - are able to have their calls for free.
This is ground breaking. A loyalty programme which rewards not based on the brands share of customer spend but on their share of customer voice.
And this makes sense, but you have to overhaul your approach to loyalty and recognise that the interaction – both between the brand and between individuals – can bring in additional (and potentially higher) revenues through both retention and word of mouth. Lauren Freedman, president of the e-tailing group says:-
Customer engagement has become a metric to be reckoned with, where failing to engage consumers via community and social media will have brand and bottom-line implications.
This is a real epiphany for many brands though – and I’m guessing for many loyalty agencies. Being so used to loyalty meaning points equalling prizing – to rewarding the behaviour after it has happened - they haven’t realised that the real focus has always been on building relationships.
Loyalty programmes don’t add value if you simply dish out points like toffees – to gain growth from the programme you have always had to encourage the behaviour you want, using the currency to reinforce good behaviours. The change now however is that “good behaviour” is not just the purchase itself, but the interactions that lead up to the purchase.
Points aren’t however dead – there will always be a need to recognise the interaction that is the purchase - but brands that haven’t yet realised that retention marketing means more than simply a deferred discount and a box of wine are missing the opportunity to unlock the real value.
This new interaction loyalty – in essence this Lean Forward Loyalty – which recognises and rewards individuals for getting involved with a brand, for sharing it with others, for interacting with it on an ongoing basis is where the future lies.
Recognising and rewarding those customers who actually “add” value to your brand – through their thinking and participation – ensures that your overall proposition remains appealing to the consumer, whether they want to be actively involved or passively entertained.
Might be time for an overhaul – might be time to break the mold.
Kimberly-Clark have launched a new loyalty programme for their Huggies brand called “Enjoy the Ride” which rewards consumers with points which they can exchange for rewards.
Nothing new about that I guess but what I think is really unique about this programme is that although it allows the member to collect points by entering codes, the codes themselves are not available on the products. Instead the member has to earn points by interacting with the brand or with friends.
Tim Abate, Senior Brand Manager for Huggies is quoted as saying “We want moms to be interacting with our brands as much as they can. They gain valuable information and offers and we can learn from their opinions, [The program is] one of the tools that lets us establish a deeper relationship with moms than we’ve had before.”
This is essentially a Lean Forward Loyalty programme.
I’ve spoken before about Lean Forward Loyalty and how this approach can totally transform a brands loyalty programme and it’s great to see Kimberly-Clark doing this with Huggies.
For those that have missed my previous posts the basics are that programmes now need to engage consumers more to get and keep their attention. They need to enable them to interact and provide reasons for them to do so – essentially to “lean forward” rather than sitting back passively.
This is achieved by creating buzz, creating reasons for people to discuss and interact and to then combine this into the longevity of a loyalty marketing programme that maintains this behaviour and deepens the relationship.
What really interests me about the Huggies programme is that whilst they have combined the interactivity of lean forward media with the longevity of a loyalty programme, they’ve done it without using on-pack codes.
It would seem that they feel that the more they can engage with consumers the more likely the consumer is to go on to buy Huggies.
Not using on-pack codes will obviously mean they cannot track actual purchases to consumers so they won’t necessarily know how many of their members love the brand and love the interaction – but then go on to buy someone else's brand. However what they will be able to track is any overall lift in purchases and the extent to which this campaign contributed to it.
The issue they may have though is maintaining the longevity of the programme once the initial flurry of activity has died down and the consumer has watched the videos, invited friends and scoured the magazines for the codes.
The advantage that on-pack codes bring to a programme like this is creating additional reasons to come back - to interact. On successful Lean Forward schemes like Coke Zone in the UK, this combination of interaction combined with on-pack codes creating reasons to visit is what really makes it work.
They may find it difficult to maintain the interaction without also recognising the transaction
Whilst they have included a daily prize draw for a years supply of nappies, experience would suggest that consumers quickly tune out of prize draws if these don’t change regularly, so this in itself will probably not create that longevity.
However it may not need as much longevity to achieve its results. As Jeff Dawson, VP of the Huggies Brand said “[the] programme is designed to establish a strong relationship with moms as they begin their journey through motherhood – ultimately creating Huggies advocates, and thus loyalty users of Huggies branded products.”
It could well be that this initial interaction with the brand, although short-lived, may be deep enough to develop that relationship and ultimately that trust.
This will really depend on whether in their chase to collect the points, the consumers actually stop and take in the content that they are attached to.
I think it will be interesting to see how this scheme works out as its essentially rewarding the interaction, not the transaction. It’s also working further up the chain in terms of consumer purchases, looking to change behaviours at the interest/desire stage rather than the action stage.
While I think this is a really great idea, ideally they’d be doing both -recognising consumers for getting involved as well as rewarding them for making a purchase – either way, it’s good to see they are trying something different.
Ever since the first e-commerce site was launched there has been a perceived battle of online and offline retail. 
